Pension cannot be substituted for compensation: HC

The Bombay High Court recently ruled the amount of pension cannot be substituted for compensation, which is to be awarded to a claimant, whose kin has expired in a road accident. The HC has accordingly directed an insurance company to pay Rs 10 lakh as a compensation to the widow of a government employee, who died post a road accident.

A single-judge bench of Justice Mridula Bhatkar ruled, “The date of superannuation of the government employee is always fixed. However the fact that after retirement, a person may survive minimum 10 to 15 years, given the advancement in medical science, the person may get the benefit of such pension for more years. The pension is a financial security to the employee and also to their spouse, postdeath. If the employee has died due to any reason (accidental, natural or unnatural), the pension is receivable by the spouse.”

“The amount of compensation is related to the accidental death, but the amount of pension is related to only death. The payment of compensation is based on contractual liability between the insured and insurer and the payment of pension is a statutory obligation of the Government. Thus, I believe, these two liabilities and obligations are different and the amount of compensation is not a substitute in any manner for the amount of pension,” Justice Bhatkar added.

The order was passed in response to a plea moved by Bajaj Alliance General Insurance Co. Ltd. challenging the orders of the Motor Accident Claims Tribunal (MACT), which directed it to pay as a compensation Rs 10 lakh to Prabhavati Babar, whose husband Hiraman died after getting knocked down by a speeding autorickshaw.

The company claimed the MACT erred in calculating the compensation amount and objected to the verdict arguing that Prabhavati was receiving a pension after the death of her husband and, therefore, her loss of dependency was compensated to that extent and accordingly, the Tribunal ought to have reduced the total compensation amount.

Justice Mridula Bhatkar directs insurance firm to pay Rs 10 lakh to widow of man killed in accident